Rio Tinto has increased its stake in Ivanhoe Mines by 5.3% to 34.9%.

The company has bought 40.1 million Ivanhoe shares at $10 each by exercising a $350m convertible credit facility issued to Ivanhoe in 2007.

The decision to increase the stake follows the announcement last week that Ivanhoe Mines’ flagship Oyu Tolgoi copper-gold mine will begin production at the end of 2012.

The mine is expected to produce more than 540,000t of copper and 650,000oz of gold during the first ten years.